We develop and estimate a model of child care markets that endogenizes both demand and supply. On the demand side, families with a child make consumption, labor supply, and child-care decisions within a static, unitary household model. On the supply side, child care providers make entry, price,...

We develop and estimate a model of child care markets that endogenizes both demand and supply. On the demand side, families with a child make consumption, labor supply, and child-care decisions within a static, unitary household model. On the supply side, child care providers make entry, price,...

Child care and education are important inputs in the human capital production function. The research of Nobel prize winner James Heckman shows that skills are built from the early childhood on and increase the returns of later educational inputs, in short: skill begets skill. Therefore, it is...